Lehman Brothers Essay

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INTRODUCTION Goldman Sachs Group, Morgan Stanley, Merrill Lynch (now as Subsidiary of Bank of America), Lehman Brothers and Bear Steams (sold to JPMorgan Chase) were the world top five investment banks in United States. They were the key players in the financial markets and make significant contribution to the economics. But when they failed, the consequences would also be extremely fatal. The 158 years old Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy on Sunday 1:45am, September 15, 2008 (“Wikipedia: Lehman Brothers”, July 15, 2013). With a total assets of $639 billion and $619 billion in debts, Lehman Brothers’ bankruptcy filing became the largest in history, It’s assets far surpassed those of previous bankrupt giants such as WorldCom and Enron (“IInvestopedia: Case Study", April 02, 2009). The collapse of the Lehman Brothers is contagious and even triggered the Global Financial Crisis. LEHMAN BROTHERS HISTORY Three brothers – Henry Lehman, Emanuel Lehman and Mayer Lehman in 1850, founded Lehman Brothers. Started as a normal dry-goods store, the brothers grew the business by buying and selling cotton to planters living in and around Montgomery, Alabama ("History of Lehman Brothers", n.d). Eventually the brothers built a cotton storage warehouse together with a cotton merchant John Wesley Durr in a brief partnership form. Thereafter in 1858, an office in New York was opened to fulfill the needs of the growing sales and trades. After Civic War, Lehman Brothers who already have a strong pressure in the cotton commodities trading moved their headquarters to New York City. They also did a part in financing Alabama's reconstruction. In 1870, Lehman Brothers together with a group of cotton merchants and traders founded the New York Cotton Exchange, which is still in operating today. Lehman brothers also start to deal with emerging market

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